RSSThe Spending Trend is Not Sustainable
The term tipping point can be applied to a process in which, beyond a certain point, the rate at which the process continues will increase dramatically. The budget of the United States has reached its tipping point. A recent event could have, in fact, marked the point in time. The first Baby Boomer—born January 1, 1946—has applied for early retirement at age 62 and received her first Social Security check. On the chart, an upturn in the Medicare growth rate can be detected in 2011 when the first Baby Boomers turn 65. Thereafter, the number of retirees continues to increase while the number of workers per retiree continues to decrease. The pyramid scheme has collapsed.
54 Responses to “The Spending Trend is Not Sustainable”
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November 13th, 2008 at 12:54 pm
The chart above clearly shows that the problem is not Social Security. The Boomers have paid in more than they will ever receive from this fund. The real problem is health care as shown by the Medicade and Medicare increases. The only solution for this problem is national health care and I’m afraid the short sighted people who have opposed this inthe past are the primary cause of this great burden.
There is gross waste in U.S. health care with many redundant insurance plans, forms, deductions, office workers, CEOs, advertising etc.
The savings alone from removing this waste and using electronic medical records would cover additional health care to millions of uninsured.
Other areas where there are problems:
1) People getting benefits without ever paying into the system. This is primarily women who also live longer. This is being somewhat reduced as more women work but they do not contribute nearly as much as men.
2) 60% of medicare spending is done inthe last 6 months of life. This is due to efforts by family to do everythig possible to keep someone alive but it a waste of money. We must have hard limits. If someone is given tow independant opinions that they have less than a year to live then they should be made confortable and not spend money on more tests and expensive care.
3) Medicade is health spend on the poor. A national health care system would cover them and make this unnecessary. Medicade can be blamed on boomers but can partially be blamed on our ignorant immigration system that lets millions cross our borders and then become legal. We must complete the fence on the Mexican border, shut down employers of illegals and change our laws that allow any baby born inthe U.S. to be a citizen with illegal parents. Letting im millions of poor will only increase Medicade expenses.
Don’t mistake national health care as being totally funded by the government. Employers now pay for much of the employee’s insurance, they will have to just pay in a % amount into the national plan. Individuals will all need to pay something as well. Even the poor can pay a small co pay.
We either have the guts to force Congress to take hard measures or we go down as another failed experiment.
October 6th, 2008 at 3:19 am
America won the Cold War with the sudden economic collapse of the Soviet Union. The victory was seen as a triumph of free market enterprise and democracy over communism. The bankrupted Russians capitulated with our demands to establish free market capitalism and democracies in exchange for financial assistance. I doubt the financial problems faced by the Soviets were the result of the conflict between the American and Soviet political and financial philosophies, because we had no control over their fiscal spending. Their own leaders pursued fiscal policies which led them to become bankrupted. I woner if any similarities would be found in the economic policies pursued by our own nation anof the pre-89′ empire and America. Who will bail out America if we fall into bankruptcy?
July 31st, 2008 at 11:13 pm
A few thoughts…
ON TERM LIMITS:
Are term limits really a suitable answer? If you were elected to the House in November, you would be in office to oversee nearly $30 trillion of GDP passage, and ~$7 trillion of tax expenditures before your term expires. If you were elected to the senate, you’d see nearly $100 trillion dollars of GDP and about $25 trillion of government expenditures. My point is simply that governance of this magnitude of activity takes a long time to grasp. Imagine if our congress were filled with representatives who had a maximum of 6 years of experience. They’d be forced to leave office just as they got the last of the wet out from behind their ears.
Also, I tend to believe that lobbyists already yield too much power in Washington. Maybe they always have - all one needs to do is watch “Mr. Smith Goes to Washington.” What happens if our elected representatives have forced limits? I believe that what little power our representatives have today would be eliminated as all the knowledge, history, finances, etc. rest with the lobbyists. If a truly ‘enlightened’ person was determined to change things, the lobbyists would simply have to wait him/her out. At least today, our representatives can look forward to establishing some level of power to pursue his/her agenda over time and longevity. That representative may even become corrupt, but at least he/she would be a corrupt person that I have a voting chance to get out of office. If the lobbyists had full reign, I’d have no vote at all. I don’t ‘dislike’ term lits, but I don’t think it’s as easy or as effective as many people romanticize.
ON SOCIAL SECURITY AND OTHER ENTITLEMENTS:
I have a friend who has a ridiculous amount of debt - about as much as his yearly income. Maybe more by now. He spends like a rock star, and he doesn’t make nearly enough money to cover his habits. Unfortunately, the basic laws of economics are starting to hit him hard, and he’s being forced to make some very hard decisions. He’s looking for another job now to pay off the debts, and in the process, he’s cutting back on some of his favorite things. He put his nice sports car up for sale, and he’s spending more time at home with his family. I think our government is in the same predicament as my friend. And like my friend, I believe our government needs to make the same hard choices. And since we are our government… That means us.
My friends, it doesn’t matter how we got behind the horse. What matters is that we’re behind the horse, and the mess from the horse has to be cleaned up or walked in. Period. I didn’t get to ride the horse, I didn’t even get to pet it. But I don’t want to walk in it’s mess, and certainly don’t want my children or grandchildren to walk in it.
How do we clean it? First… We need to get the horse to stop making messes. We need to stop the deficit spending immediately and start getting our financial house in order. Next, we need to start cleaning up the piles. Part of cleaning up piles of “mess” is figuring out where to dump them. Since we’re all in the pen together, we’re all going to have messy boots, and we’re all going to have to dig in deep, pick up our share, and carry our share out of the pen. That means… Cutting back on entitlement payouts. Increasing the eligible age for Social Security benefits. Increasing Social Security & Medicare taxes. Freezing growth in all government programs for multiple years. Informing the younger generations that their “fair share” of Social Security benefits will be significantly less than their parents, thereby lessening the tax burdens of future generations. We may even want to investigate a gradual phasing out of some programs like Social Security. Once the mess is cleaned out of the pen, and everyone agrees that the pen is cleaned out, then we can think about whether and how to get on the horse again.
The way I see things, we have no other choice. ….Of course we could decide to just to walk in the ‘mess’ the horse leaves, and watch as it gets piled higher and deeper for our children. I personally find that distasteful, and am willing to support hard choices and real action that cleans out the pen.
BTW… Has anyone seen the other pens? The state pens are just as deep, some deeper. And the local pens are looking pretty mucky too.
ON FREE TRADE
I suppose that some day, historians will look upon the early 21st century and ponder how the American people agreed to give away their wealth. I also wonder if any nation has ever done that before. I’m an American, so I’m a profit-loving capitalist. But surely there is a better way to grow developing nations through better trade deals that encourage the growth, not the exploitation, of other nations’ workers while maintaining wealth and power.
I suppose I’m just some crazy, horse-following, opinionated, arm chair chart monkey. Now where’d I put my Chinese customs and history book? I think I’m going to need it.
July 29th, 2008 at 8:43 pm
You’ll have to excuse me Mr. Perot, This needs to be said!
EXCUSE ME MRS. GEN Xer,
“I am angry at the generation that went before us…they were the ones at the helm when over the last decades”
It sounds as though you did VERY WELL by that PAST generation by what you say???
You say, and I QUOTE, “I am a 36 year old married mother of two young children. My husband and I are lucky…we make a good living and are able to save approx 20% of our salaries - between 401K’s, 403B’s, IRA’s and savings in 529 plans for our kids’ education”
I suppose the education you got to do all this was just handed to you? I’ll bet your Mother and Father BUSTED their BUNS for years to get YOU through School. Who the HELL do you think paid for all that “Public Education” while you were YOUNG???
AND, who do you think paid for their Parents retirement? Not YOUR mother and father …nooooooooo
The problem is not with the system, it is how the system hs changed through the years!
As aristotlehoop put it:
“When I signed up for Social Security in 1956 I was promised two things:
“My Social Security number could not be used for any purpose other than Social Security.
My contributions would be kept separate from the general fund and would only be used for Social Security payments.
“Social Security was fixed in 1986. Let the politicians fund their pet projects and wars with tax money. Let them keep their hands off Social Security contributions. My social security contributions, if invested carefully, would pay off better than social security does. I AM ENTITLED TO MY SOCIAL SECURITY PAYMENT.”
Had the system stayed this way, you wouldn’t be complaining about giving YOUR mother and father the same benefit they gave theirs! Do you have any idea how much MORE is collected every year in SS and Medicare benefits than is PAID? The problem is they used it all on other PET projects, TOOK OUR money and spent it ELSEWHERE!!! BUT NO…Our wonderful Government MADE new laws, pertaining to these funds, so they could further TAP another source of income for these PET projects!
We (the generation that went before us, as you so nicely put it) have PAID our share, MUCH more than we will ever receive!!!! It is now YOUR turn! If you don’t like it, FIX the system! But, do not TOUCH MY bennies, I now depend on to survive, or you will have a MAJOR Generation Gap WAR on your hands!
Look at the GREEDY politicians, not the previous generation for the problems at hand now.
I also want to thank Mr. Perot, for his long hard work not only on this site, but throughout his LIFE, in trying to make a difference! Also for providing this wonderful site, where IF people take the time, can see where the problems are.
I voted for you Mr. Perot, you won me over with your “Giant, sucking sound” speech.